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Subject: Mar 15:
Armstrong doesn't understand the exorbitant privilege of controlling the reserve currencyFrom: iamback
Date: Sat, March 14, 2015 4:41 pm
To: "Armstrong Economics" <
armstrongeconomics@gmail.com>
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But Armstrong still missed the main point. It is impossible to eliminate debt, for that is human nature. Investors buy debt. And investors will measure their ROI against the dominant reserve currency as they do now, thus whether the individual countries sell their debt denominated in the reserve currency or their own national currency is largely irrelevant to the outcome, because the enslavement is caused by what the investors use as their unit-of-account and thus the central bank for the dominant reserve currency will have implicit control over the fiscal and capital account flows of each nation.
I suggest you relate that to "Confessions of an Economic Hitman" by John Perkins. And also relate that to the Asian crisis in 1998, which was caused by speculative international capital flows fleeing to Europe to take advantage of the ingress in investment that corresponded with the launch of the Euro.
Nations are inherently prone to short-term capital ingress and egress. Without their own central bank to inflate out of an egress crisis, they are enslaved by the unit-of-account which is imposed on them by investors.
Sorry there is no way to make a reserve currency that isn't an enslavement paradigm. All the one world reserve currency will accomplish is transfer the seat of power for control from the USA government and Fed to the international central bank (which of course be controlled by those who have the most power). The only solution is for debt to become much lower ROI activity than the mainstream economy, thus the high ROI Knowledge Age workers will exist in a parallel economy that ignores the socialistic, collectivist economy of government and debt.
I am very surprised that Armstrong can not conceptualize what I wrote above. He responded by pretending to himself that I am some simpleton who is only learning from him. He failed to understand I am not talking about the existing debts. I am talking about the new debts that will form after the global monetary reset (restructure or default).
My point is if we look at Greece, it sold its sovereign bonds denominated in the Euro(pean) reserve currency and thus it suffered pernicious (and self-reinforcing downward spiral of) austerity because it was not able to devalue the debt it owed by printing money to devalue its own currency and stimulate its economy by lowering the international cost of its exports and tourism industries.
Even more importantly as we can see with the dollar reserve currency now, countries that sell debt in denominated in their national currencies pay an interest premium compared to when they sell debt denominated in the reserve currency. This is one example of many reasons[1] that those who have control over the reserve currency's central bank, have enslaved the other nations. This is why a USA Treasury official famously said to his Third World cohort, "its our dollar, but it is your problem".
Armstrong is failing to understand that a reserve currency is inherently an enslavement paradigm. And the only possible way to eliminate this paradigm, is to make debt not profitable for investors. I explained how that will become the case with the shift from an Industrial Age to a Knowledge Age. But I think Armstrong is not smart enough to grasp the concept. Or he is too lazy to read the essays I wrote, which I had provided him links to.
Additionally I am shocked that Armstrong is conflating unit-of-account with unit-of-exchange. That is the most basic error. The coming one world reserve currency will not be a circulating currency that is used for retail transactions. If that were the case, then the nations wouldn't even have their own currencies any more. The reserve currency will be used for settlement internationally for exchange between the national currencies which will float against the one world reserve currency. I don't think the nations will agree to give up their control over their national currencies, rather they will just agree to a reserve currency that isn't controlled by the USA exclusively.
http://armstrongeconomics.com/2015/03/14/default-or-restructure/QUESTION:
Hi Martin,
I was reading your blog posting on, Real Estate 15yr v 30yr Mortgage & New Electronic Currency Coming and you state that with the new electronic currency coming (which, as you say, will be the new reserve currency), governments should not be able to borrow and debts should be eliminated. I agree that the governments should not be allowed to borrow, but how would debts be eliminated?
Foreign governments (and private holders) that hold US debt would lose trillions. Wouldnt this cause a war? Or are you saying that the US, along other governments, will cancel their debt since there is a rise the cycle of war (probable war on the horizon)?
I fully agree with that governments have no intention on paying anything back anyway, Im just a little confused how this would unfold
Outstanding work, youve taught me so much! Thanks!
ANSWER: That is outlined in the Solution Conference. We can only default or restructure. The latter allows society to function whereas the former wipes out everything from banks to pensions. The former is unlikely by design. Debts can be eliminated by restructure.